I am dressed up like a seal, the favourite food of the great white shark, in my hooded black wetsuit. I am about to jump into a flimsy cage, suspended in the Indian Ocean, which I'm told is teeming with the said predators - and I have paid nearly £100 for the privilege. Is there something wrong here?

While I could certainly question my sanity and that of my shark cage buddies, the industry itself is South Africa's fastest growing wildlife adventure experience. Last year, an estimated 100,000 people offered themselves up for a dip with the toothy beasts in the western Cape alone. The Cape is fast becoming the shark-watching capital of the country, if not the world, and is a lucrative business for the 12 operators who run packed "shark safaris" every day. However the activity is proving controversial, particularly with local residents, surfers, divers and fishermen, who insist that baiting the sharks to approach humans and boats is linked to a worrying rise in local attacks.

To investigate further I decided to try it for myself, and was recommended Dyer Island Cruises, which runs whale and sharkwatching boats out of Gansbaai, under the watchful eye of Dr Michael Scholl. A world-famous marine biologist and conservationist from Switzerland, Scholl has been tagging and studying great whites for almost 10 years and is credited with discovering their migratory path from South Africa to Australia. If ever there were an ethical shark dive operator, this would be it.

After a sprightly 5am pick-up from my Cape Town hotel, it was a two-hour drive east along the coast, beyond the whale-watching Mecca of Hermanus. A welcome breakfast followed and then a fascinating presentation from Dr Scholl on the behaviour of our misunderstood friends, the great whites. "The cage is 100% safe if you follow instructions," we hear. While one photo - of an open-jawed shark knocking shut the lid of the cage when a diver wavered too long about jumping in - caused shock waves around the room, the overall effect was to heighten excitement and instil confidence about our imminent encounter.

If we get close enough, he says, we should look into the shark's eyes, which in fact are not dead black but dark blue. Hmm. As if we weren't scared enough, we learn that sharks have a sixth sense and are able to "see" with their eyes shut thanks to the electromagnetic fields around our bodies. When hunting, the sharks will roll their eyes entirely backwards to protect them and go for the kill effectively blind. They still know exactly where to bite, the biologist tells us proudly.

There were also two important caveats from Dr Scholl: if you ever, ever get seasick, take a tablet well before you set out on the choppy water, and don't believe that a shark sighting is guaranteed.

Almost immediately after setting out, people were retching over the side of the boat. Added to the mix were several gallons of fishy "chum" - a vile smelling fish-based slew thrown overboard to draw the sharks closer. My stomach just about held firm, but we lost four green-faced members of our company to the early pick-up boat.

It was just the stalwarts left: your regular mix found at any attraction on the adventure tourism circuit, including a middle-aged South-African teacher, who had been living abroad and wanted to "push the boat out a little", and some honeymooners from the UK - one decidedly keener than the other.

It was crunch time. Anyone who wanted to go in the cage, now or later, had to don a wetsuit and get ready. I zipped up, grateful at being forced to opt in early, but joined the back of the queue in no hurry to jump in first. The cage itself just about holds four adults, in a side-by-side standing formation, and is tethered to the side of the boat like a kind of punishment cell. I'm pleased to sit out and watch as the first four slide in. After a chilly wait in the water, it turns out that they have the closest "swim-by" experience, with a shark passing the cage just inches from their noses. They are elated: "It's the best thing I've ever, ever done," they crow. "Well worth the wait and the cold water!"

I'm still not leaping up to be picked for the next rotation, but finally take the plunge and find that with the strong current, almost all my attention and energy goes to keeping my mouth above the water to breathe and holding on to the bars of the cage to keep all my limbs inside. As a result, I'm not particularly nervous or scared. In addition to the "chum slick", simulating the smell of a fish carcass beside the boat, the operators throw some tuna heads out on a bait line right in front of the cage.

Eventually, we hear the cry, "look out, on the bait, on the bait!" We get ready and on cue we duck our heads under and try to make out the sleek form of the 3.5m long shark swimming in front of us through the murky water. Perhaps luckily, visibility is only one to two metres and I can only make out the dark outline of its body swimming past, several metres off. I'm glad I made it into the cage for the "once in a lifetime" factor, but the shark-viewing is definitely better from the boat.

I decide to raise a few concerns with Dr Scholl. How can this type of activity not be conditioning sharks to associate humans with food? The scientist gives a robust defence. Firstly, he says, the sharks are not resident here, so those encountered on a daily basis are not the same individuals and cannot develop any kind of Pavlovian response as they are not receiving frequent enough "training". Secondly, his boat staff do their best not to "feed" the sharks: although they are not always quick enough, they do their best to pull the bait out of the water before the shark gets to it. Even if the bait is taken, its food value is not worth the energy expended in the swim across to it. Thirdly, the sharks are unable to smell humans in wetsuits over and above the stench of the chum - something I can well believe. And fourthly, a shark perceives the boat, the cage, and those on board as one entity, larger than itself, as a lion perceives a safari jeep and its load of passengers. If a person falls overboard, then they are toast, just as a safari tourist would be if they left the vehicle in the proximity of lions. The practice of chumming, much maligned by critics of the shark industry, is far from new and has long been used by fishermen without controversy, he adds.

Are there any responsible tourism issues in this industry? "Definitely. All the shark companies claim to be in eco-tourism. For me, eco-tourism is all about education and respect. If you don't provide information and respect the animals, then what's the point?"

I discover that Dyer Island Cruises' slogan is a "discover and protect" and customers can donate money to build homes for threatened penguins on nearby Dyer Island. Yet Scholl confesses, "I am not liked in the industry because I speak out so much."

And the industry is not liked at all by many ocean users such as divers, surfers and fishermen. One vocal opponent is Paul Botha, a veteran water sports promoter who organised a major debate last month on shark attacks in the Cape peninsular.

"Scientists tell us there's no such thing as a rogue shark and that humans are not on the shark's food list. These are absolute fallacies. I've surfed in 30 countries and nowhere else has a problem like this," Botha tells me. "Prior to 2002 the last shark attack in False Bay was in 1984, but since 2002 we've had 12 attacks."

While the campaigner doesn't believe that shark cage diving is solely to blame for the recent rise in "abhorrent" shark behaviour - the destruction of seal habitats on the west coast by commercial fishermen also plays a part - Botha believes that industry practices such as baiting and using seal decoys are conditioning the sharks to lower their fear of association with humans.

"I believe that the industry as a whole is conditioning the sharks; they are becoming bolder. Parents in particular, whose children spend a lot of time in the water, feel very strongly about the shark cave diving and the conditioning of the sharks," he says.

Botha believes that in addition to increased funding of shark-watching schemes at the Cape's most popular beaches, the shark diving companies should be forced to be "a lot more ethical about the way they do it". "You don't chum for whales or put a dead mule at the waterhole when you're looking for lions. If you want to see great whites, then get in a boat and go and look for them. If this is so safe, why not put the people in the water without the cage?"

Botha admits that reducing the near-guarantee of shark sightings won't be attractive to the operators, he believes political will must be found to tackle the problem - or the tourism industry itself will take an expensive hammering.

"Why should future generations run the gauntlet when I've had 45 years of paradise?"

It may be some time, however, before the lucrative trade pulls out of the water and a tourist's shark-watching experience means a trip to the Cape Town city aquarium.

WAY TO GO

From London Heathrow, South African Airways fly direct overnight to Johannesburg twice a day and daily to Cape Town. Fares start at £528 plus tax. 0870 747 1111, www.flysaa.com